Due to the market selloff, the yields on many popular dividend shares have just got very juicy.
This certainly is opportune given the low interest rate environment that we are living in.
Listed below are three top dividend shares which I think would be great options for income investors once the volatility eases. Here's why I like them:
BHP Group Ltd (ASX: BHP)
This mining giant's shares have been sold off over the last few weeks during the market volatility and the collapse in oil prices. I think this has been a big overreaction given the mining giant's relatively small exposure to oil. Furthermore, with iron ore prices remaining steady during the volatility, I think BHP is well-placed to deliver bumper free cash flows again in FY 2020. And with the company returning the vast majority of this back to shareholders, it bodes well for its dividends. At present I estimate its shares offer a fully franked forward 7% dividend yield.
Commonwealth Bank of Australia (ASX: CBA)
Australia's largest bank has seen its share price fall heavily this month due to concerns that the coronavirus could hurt the economy and lead to a jump in bad debts. Whilst I believe this is a real possibility, I think its shares have been severely oversold. This could make it an opportune time to pick up shares if you don't already have meaningful exposure to the banking sector. Even if you factor in a cut to its dividend in FY 2021, its shares provide a forward fully franked 6.1% dividend yield.
Telstra Corporation Ltd (ASX: TLS)
Another option for income investors to consider is this telco giant. I think its recent share price weakness has created a buying opportunity once the market volatility eases. Especially given the progress it has made with its T22 strategy, the status of the NBN rollout, and improving conditions in the telco market. Another positive is that I believe Telstra's 16 cents per share dividend is sustainable from its free cash flows and no further cuts will be necessary. This equates to a fully franked dividend yield of 4.8%.
